Are Your Business Systems all set for Brexit?
The UK has left the European Union and the transition process has begun for a full departure from the EU over the coming months.
But what does this mean for business infrastructure and what do you need to know?
The KFA team have set out some advice for businesses and eCommerce operations: Now that the withdrawal from the EU is underway, there’s several considerations that businesses need to be aware of, specifically around IT systems and the buying and selling of products.
Firstly, if you are a UK-based business buying or selling into Europe you will need to plan for potential changes to VAT. The reverse charge of VAT may no longer be applicable, so you may need to start paying or charging VAT from businesses that you deal with in Europe.
If you haven’t already got one, you will need an EORI (Economic Operators Registration and Identification) number, which starts with a GB if you want to continue to import or export goods into or out of the UK – without one you risk increased costs and delays with HMRC.
With the details of any post-Brexit trade deal yet to be agreed, it is still unclear what changes are likely to be introduced. However, we recommend allowing more time for delivery and receipt of goods, as changes to systems at customs will require additional time to clear and be prepared for delays, at least initially.
Different types of goods have different import requirements, so check these carefully. Things to look out for are; do you need a duty deferment account, who will make the import declarations and is a proof of origin required?
If you’re relying on procuring products from the EU, then ensure that your forecasting is as accurate as possible, allow for more time to make sure that you can continue to meet production demands. The same applies to selling goods into the EU, delivery charges may increase as clearance through customs will take longer.
If you have an eCommerce arm to your business, you may need to review your pricing, allowing for additional charges from suppliers, customs and logistics providers.
Companies that decide to relocate offices or accounts from the UK to EU countries will need to make system changes to add additional locations and integrate with other systems. The physical location of a business or where an eCommerce website is actually hosted will become more important to your business…
Companies with websites currently hosted in EU member states may decide to move these back to the UK. It might also be worth considering new language translations, new delivery methods, customs charges, new product pricing in foreign currency or new VAT charging functionality if new trade deals are struck with different countries.
New systems and processes may increase the requirement for purchase orders and invoices to be processed using Electronic Data Interchange (EDI), ensuring that data is transferred securely and within stringent regulations.
Equally, if you are a UK citizen running a business in an EU country, then you need to be aware of different regulatory requirements you may need to comply with.
The security and protection of data will continue to be of paramount importance, once the UK leaves the EU. The government plans to incorporate the current GDPR legislation, which was introduced in 2018, into UK law after Brexit – with the same restrictions applying.
If you are a UK business or organisation that receives or holds personal data from contacts in the EU, then you will need to take extra steps to ensure that the data continues to flow after Brexit, whilst adhering to GDPR regulations.
As UK businesses head into the transition period for the remainder of 2020, business leaders should focus on planning, to ensure all opportunities are considered and advice sought. A series of sector-based planning notices have been issued by the UK Government and European Commission, to help plan during the transition phase.
Although the government has committed to a ‘business as usual’ phase until the end of this year, now is the time to start thinking about 2021 and beyond and planning for a no-deal. Make sure you seek advice to check that your IT systems are ready for the challenges and opportunities.
Our top planning tips
- Forecasting – allow longer time for procuring products from EU to ensure you can continue to meet production demand.
- Pricing – review selling pricing on eCommerce websites, changes may need to be made to place UK transactions into the same category as ROW.
- VAT – check if your business will need an EORI number.
- Suppliers and customers – take time to map out your supplier and customer base, so you can consider how changes in the UK-EU trade relationship could affect them.
- IT systems – get ready for a no-deal, are your IT systems ready for potential changes?